11th November 2019 Press Release from InfolinkGazette

Mechanical, Electrical, Public Health and Fit-out specialists, Holmes Metrotech Ltd, who abruptly left a £19m hotel fit-out job in Shoreditch, east London leaving unpaid bills to its supply chain, went in to Administration owing £3,548,920 to 105 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the accounts filed at Companies House, took advantage of all the exemptions and were therefore totally lacking in transparency”. Greg added, Creditors probably wouldn’t have seen this coming until the invoices stopped being paid and is a good example of the benefits of trade credit insurance”.

Metal coating specialists, Orion Coil Coating Limited went in to Liquidation owing £1,732,720 to 24 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Orion Coil Coating Limited legitimately filed micro company accounts, but this form of filing is so opaque, trade suppliers can’t make informed lending decisions”. Greg added, in this case, the only indication that anything might have been amiss, was that the financial trend was down; if the working capital, or net worth have fallen over prior year, prospective trade suppliers should request sight of the unabridged accounts before extending credit”.

According to statistics from InfolinkGazette, Kier Group Plc have issued 2 profit warnings this year. Greg Connell, MD of InfolinkGazette said: “even before the profit warnings, the troubled construction firm revised up its net debt by £50m after a change in accounting policy (code for accounting error) in relation to the group's hedging activities. https://www.cityam.com/kier-group-lenders-trying-to-offload-outsourcers-debt/

Flooring seller, Floors 4 You Ltd went in to Liquidation owing £1,669,360 to 71 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the last filed accounts showed a significant fall in the P&L reserves, which can only be explained by a large loss, or a dividend paid out of reserves; the accounts also revealed severe liquidity issues and exceptionally high gearing. Greg added: this is a good example of the benefits of integrating business information in to the credit management process”.

According to statistics released by InfolinkGazette, bank note and passport printer DE LA RUE have issued 3 profit warning since 2018. Greg Connell, MD of InfolinkGazette said: “De la Rue is cooperating with the Serious Fraud Office investigation in relation to suspected corruption in the conduct of business in South Sudan”.

The baked potato specialist T & G Fast Foods Developments Limited t/a Spudulike has closed all 37 of its branches and entered Administration owing £7,403,870 to 78 unsecured creditors. Spudulike Group Ltd were also unsecured creditors, and they entered liquidation owing £451,755. Greg Connell, MD of InfolinkGazette said: “the replacement of retail tenancies with increasing levels of food and drink outlets as demand for conventional retail space decreases has created a greater choice of dining options for customers and the humble spud seems to have lost out”.

PEDERSEN HOLDINGS Ltd has allowed its sea transportation subsidiary CHARTER SERVICES (2004) LIMITED to enter in to Liquidation owing £3,524,150 to 19, predominantly group company unsecured creditors. Greg Connell, MD of InfolinkGazette said: “most of those loans will have been reported as assets on the balance sheets of the group companies, which means there will be some big write downs, and weaker balance sheets presented in upcoming financial statements”.

Amazon seller, FSX Media Limited went in to Liquidation owing £1,232,460 to 72 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “when accounts are prepared under the micro-entity provisions, it is difficult to identify risks, but based on very little data, suppliers would have assumed all was well.” Greg added, “as more companies adopt the micro-entity provisions, risk managers need to look for other indicators of problems, and in this case it would have been multiple accounting period adjustments; these adjustments are strongly correlated with business failure”.

Listed company ICONIC LABS PLC has allowed its Biotech subsidiary WideceIIs Ltd to enter in to Liquidation owing £1,473,360 to 20 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Widecell’s independent auditors had qualified the accounts with “material uncertainty”. Greg added: “Iconic Labs were creditors themselves, which sometimes gives trade suppliers a false sense of security”.

Airport maintenance company, Airport Facilities (Gatwick) Limited went in to Liquidation owing £2,797,720 to 200 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “there is a First Gazette notice for compulsory strike-off against the parent company MARCO GROUP LIMITED, who are 3 months overdue filing accounts.”

Health, hygiene, and home products producer Reckitt Benckiser issued its second profit warning of the year, stating that revenue outlook for the full year 2019 had been lowered to reflect the combination of a weak Health performance in Q3 and inherent seasonal uncertainty in Q4. The board also expect a modest margin decline in 2019. Greg Connell, MD of InfolinkGazette said: “in the last 12 months, we've provided our clients with details of 330 companies that have issued profit warnings, and as more listed companies are issuing profit warnings, we are on pace for 350 profit warnings in 2019".

The iconic Belfast shipyard might have been saved but when the two Harland & Wolf companies went into Administration, 22 UK unsecured creditors lost over £5 million. Greg Connell, MD of InfolinkGazette said: “neither company had filed accounts at Companies House since the 2016 Statements”.

Cheshire-based construction company, Pochin’s Limited went in to Administration owing £48,446,000 to 60 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the Pension Protection Fund are one of the unsecured creditors, owed £25 million, despite the last accounts showing a deficit of only £2.6 million”. Greg added: “a good rule of thumb for recalculating realistic pension liabilities when evaluating financial statements is to take the assets at face value, but multiply the liabilities by 1.5 and then recalculate the deficit; the revised figure will reveal a more representative view of the pension deficit in the event of an insolvency”.

AIM Listed MODERN WATER PLC has allowed its subsidiary, Modern Water Services Limited to go in to Liquidation owing £24,480,500 to 28 UK unsecured creditors, including £24,191,150 to Modern Water PLC itself. Greg Connell, MD of InfolinkGazette said: “when a parent company allows one of its subsidiaries to go in to creditors voluntary liquidation it speaks volumes about the credit status of the parent company.”

Electrical Contractor, Weston Electrical Services Limited went in to Administration owing £2,610,220 to 117 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “with margins of less than 1%, and the Shareholders' funds/total assets ratio consistently below 0.3, companies like this exist on a knife edge; they are only ever one contract going awry from failure .”

Award winning luxury leisure vehicle manufacturer, Lunar Caravans Limited went in to Administration owing £6,865,030 to 334 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the company was hit with the double whammy of mounting warranty issues from a period of rapid expansion and a 20% fall in 2019 sales.”

Commercial Builders, CKC D & B Limited went in to Liquidation owing £4,135,910 to 109 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the 2018 accounts, revealed that the distributable reserves fell from just under £1 million to less than £1,000 in a single year”. Greg added, such is the lack of transparency on totally exempt accounts, creditors can’t tell if the reserves were taken as a dividend, or the company made a huge loss during the year.”

Flue and chimney products, H Docherty Limited went in to Administration owing £4,415,460 to 316 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “shareholders funds were only 5% of total assets, which isn’t sustainable; the company had a healthy current ratio, but stocks were a very high proportion of current assets, which would have caused a severe strain on liquidity.”

https://www.bbc.co.uk/news/business-49919189 Greg Connell, MD of InfolinkGazette said: “There was a greater than 4-fold increase in the number of profit warnings issued by the UK’s top companies in September 2019, compared to September 2018.” Greg added: “With 33 profit warning issued in a single month, now would be as good time to review risk management policies and in particular Trade Credit Insurance cover.”

Imperial Brands CEO Alison Cooper quits after profit warning. In a statement issued by the company, the board stated: “we expect our overall NGP business will grow net revenue by around 50% this year, albeit below our expectations. The USA NGP environment has deteriorated considerably over the last quarter with increased regulatory uncertainty, including individual US state actions. This has prompted a marked slowdown in the growth of the vapour category in recent weeks, with an increasing number of wholesalers and retailers not ordering or not allowing promotion of vaping products.”

Brewers, Box Steam Brewery Limited went in to Liquidation owing £1,136,430 to 16 UK unsecured creditors. Greg Connell, MD of InfolinkGazette said: “a quick glance at the January 2019 Balance Sheet would have told trade creditors everything they needed to know: negative net worth; severe liquidity issues and big trading losses.”

 

8th October 2019 Press Release from InfolinkGazette

Preppy clothing brand Jack Wills bought by Mike Ashley’s Sports Direct for £12.8m in August went in to Administration owing £40,356,300 to 112 UK unsecured creditors.

After a stuffing in the Feb 2018 CVA, the 275 unsecured creditors of Jamie’s Italian Limited finally get cooked with losses of  £6,720,420. Secured Creditor were basted with HSBC set to lose almost £40 million. Greg Connell, MD of InfolinkGazette said: “Once again, we see how the book value of assets evaporates in an insolvency, with £29.9 million of assets subject to a floating charge that are only expected to realise £400,000.”

 

AIM listed public company Aggregated Micro Power Holdings plc has made a £4.7m adverse restatement to its 2018 accounts. The board stated: “This review has concluded that, stock as at 31 March 2018 had been overstated due to the systems incorrectly accounting for stock movements around the 2018 year end with certain costs incorrectly being capitalised. Also, during this period, there were a number of purchases which were incorrectly accounted for due to a back-log in processing leading to an understatement of accruals and goods received not invoiced. The aggregate adjustment to Retained Earnings as at 31 March 2018 is likely to show a negative impact of £4.7m. Greg Connell, MD of InfolinkGazette said: “trade suppliers should be aware that the credit scores delivered by the CRA’s would have been based on inaccurate financial data”.

 

The most recent Carillion victim? Aspin Group provided civil engineering products and services, with expertise in foundations and piling for rail, power networks, civils, and highways, went in to Administration owing £4,179,450 to 238 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “unsecured creditors could see a dividend of as little as 3p in the pound”. Greg added: “Aspin had been experiencing margin problems since 2015 but attempts to restructure wouldn’t have been helped by the £800,000 bad debt resulting from the Carillion liquidation.

 

Luxury concept store Boutique 1 went in to Liquidation owing £10,932,900 to 44 unsecured creditors, including £8,867,474 owed to Boutique 1 (London) Ltd. Greg Connell, MD of InfolinkGazette said: “from the accounts filed at Companies House, it looks like the store could have been losing between £2 million and £4 million a year”.

 

Cocktail bar and club, popular with celebrities MHSK Limited t/a Mahiki Kensington went in to Liquidation owing £1,918,960 to 94 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “incorporated in April 2017, the company never filed accounts and was 7 months delinquent by the time of the resolution to wind-up.” Greg added: trade suppliers couldn’t have known how perilous the financial situation was, but delinquent accounts should be interpreted as a big red flag”.

Halfords has issued a second profit warning, blaming poor summer weather and weakening consumer confidence for a slump in sales. The board now anticipate FY20 underlying profit before tax to be within the range of £50m to £55m versus a range of £58m to £62m in the first profit warning.

 

Steel stockholders, Mercer & Sons Limited went in to Liquidation owing £2,063,300 to 273 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “on 25th June 2019 a charge was registered in favour of Fixings and Tools Limited, who were one of the beneficial owners of the business.”

 

Loss making mobile content distributor Mobile Streams PLC has announced its intention to seek shareholder approval to cancel listing of shares on London's junior AIM. Commenting on the reasons behind the delisting, the board said: “In recent years, the revenues have declined significantly, and the Directors consider that the scale of the business is no longer appropriate for that of a publicly quoted company. Additionally, the Directors believe that rebuilding the business as a publicly quoted company will be more challenging due to the management time and the legal and regulatory burden associated in maintaining the Company's AIM listing.”

 

Meat wholesalers, Nigel Fredericks Trading Limited went in to Administration owing £3,865,240 to 93 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Nigel Fredricks was pre-packed less than 12 months ago, so this is the second time trade creditors have taken a loss.”

IT Services Company, Hutchinson Networks Limited went in to Administration owing £1,896,980 to 180 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The company grew rapidly in 2018, almost doubling the number of staff after an injection of new debt and equity but lost money on some of the IT projects undertaken; with no more funding available, the company ran out of cash.”

Manufacturer, Quinn Radiators Limited went in to Administration owing £7,356,770 to 257 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the Administrators report informs creditors that there is significant over capacity amongst European panel radiator manufacturers and Quinn faced stiff competition from Turkish manufacturers who have benefitted from the significant depreciation in the Turkish Lira”. 

Harewood Associates Ltd, which offered unregulated investments in property went in to Administration owing £31,838,519 to 878 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the company was selling unregulated loan notes to private investors with typical rates of up to 12% per year, and as the unsecured creditors are mostly private investors, the Administrators have anonymised the list”. Greg Added, “the search for yield in a low interest rate environment is tempting some private investors in to hugely speculative investments that put at risk the majority of their capital”.

Prime Industries Limited went in to Liquidation owing £2,062,770 to 78 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “apart from the usual warning sign of overdue accounts, the Health & Safety Executive (HSE) show 6 breaches for control of hazardous substances and health & safety related issues”. Greg added: “risk managers rarely check the HSE database, but multiple HSE breaches and business failure are correlated”.

 

The Wiggins Teape Pension Scheme has been left with a £55 million deficit, which is in addition to the 420 Unsecured Creditors who lost over £14M . Greg Connell, MD of InfolinkGazette said: “ the participating employer in the former FTSE 100 constituent showed a net surplus of £73.6 million in the last accounts, which on a solvency basis 18 months later turns out to be a deficit of £55 million.” Greg added: “creditors should ignore pension surpluses shown in company accounts, they are calculated on a flawed basis and even valuations completed in 2018 are out of date”.

 

SURREY CONSTRUCTION SOUTH EAST LIMITED went in to Liquidation owing £3,618,240 to 112 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The 2018 accounts have been overdue since 31st May; the parent company Lucas Design & Construction Ltd are also late filing their accounts”. Greg added: the filing history reveals repetitive accounting period adjustments that are a common feature in the history of failed businesses; if the accounts available at Companies House are over 21 months old, trade creditors would be well advised to suspend credit”.

 

Eddie Stobart Logistics plc issues a second profit warning and is suspended from AIM as it fails to publish interims in time. The Board Announced that: as part of the Group's review carried out in conjunction with the Group's auditors in relation to the interim results, the Board is applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions. While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on Adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the Half Year Trading Update on 9 July 2019.

 

5th September 2019 Press Release from InfolinkGazette

Steel stockholders, Mercer & Sons Limited went in to Liquidation owing £2,063,300 to 273 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “on 25th June 2019 a charge was registered in favour of Fixings and Tools Limited, who were one of the beneficial owners of the business.”

Loss making mobile content distributor Mobile Streams PLC has announced its intention to seek shareholder approval to cancel listing of shares on London's junior AIM. Commenting on the reasons behind the delisting, the board said: “In recent years, the revenues have declined significantly, and the Directors consider that the scale of the business is no longer appropriate for that of a publicly quoted company. Additionally, the Directors believe that rebuilding the business as a publicly quoted company will be more challenging due to the management time and the legal and regulatory burden associated in maintaining the Company's AIM listing.”

 

Meat wholesalers, Nigel Fredericks Trading Limited went in to Administration owing £3,865,240 to 93 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Nigel Fredricks was pre-packed less than 12 months ago, so this is the second time trade creditors have taken a loss.”

IT Services Company, Hutchinson Networks Limited went in to Administration owing £1,896,980 to 180 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The company grew rapidly in 2018, almost doubling the number of staff after an injection of new debt and equity but lost money on some of the IT projects undertaken; with no more funding available, the company ran out of cash.”

Manufacturer, Quinn Radiators Limited went in to Administration owing £7,356,770 to 257 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the Administrators report informs creditors that there is significant over capacity amongst European panel radiator manufacturers and Quinn faced stiff competition from Turkish manufacturers who have benefitted from the significant depreciation in the Turkish Lira”.

Harewood Associates Ltd, which offered unregulated investments in property went in to Administration owing £31,838,519 to 878 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the company was selling unregulated loan notes to private investors with typical rates of up to 12% per year, and as the unsecured creditors are mostly private investors, the Administrators have anonymised the list”. Greg Added, “the search for yield in a low interest rate environment is tempting some private investors in to hugely speculative investments that put at risk the majority of their capital”.

Prime Industries Limited went in to Liquidation owing £2,062,770 to 78 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “apart from the usual warning sign of overdue accounts, the Health & Safety Executive (HSE) show 6 breaches for control of hazardous substances and health & safety related issues”. Greg added: “risk managers rarely check the HSE database, but multiple HSE breaches and business failure are correlated”.

The Wiggins Teape Pension Scheme has been left with a £55 million deficit, which is in addition to the 420 Unsecured Creditors who lost over £14M . Greg Connell, MD of InfolinkGazette said: “ the participating employer in the former FTSE 100 constituent showed a net surplus of £73.6 million in the last accounts, which on a solvency basis 18 months later turns out to be a deficit of £55 million.” Greg added: “creditors should ignore pension surpluses shown in company accounts, they are calculated on a flawed basis and even valuations completed in 2018 are out of date”.

 

SURREY CONSTRUCTION SOUTH EAST LIMITED went in to Liquidation owing £3,618,240 to 112 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The 2018 accounts have been overdue since 31st May; the parent company Lucas Design & Construction Ltd are also late filing their accounts”. Greg added: the filing history reveals repetitive accounting period adjustments that are a common feature in the history of failed businesses; if the accounts available at Companies House are over 21 months old, trade creditors would be well advised to suspend credit”.

 

Eddie Stobart Logistics plc issues a second profit warning and is suspended from AIM as it fails to publish interims in time. The Board Announced that: as part of the Group's review carried out in conjunction with the Group's auditors in relation to the interim results, the Board is applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions. While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on Adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the Half Year Trading Update on 9 July 2019.

 

Construction giant Shaylor Group Limited went in to Administration owing £34,932,800 to 666 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Most of the large Credit Reference Agencies were still recommending credit right up until the appointment of Administrators, which serves to demonstrate the benefits of credit insurance, even when the experts are saying all is well”.

 

Luxury chocolatier Rococo Chocolates Ltd could sweeten the deal for 87 unsecured creditors, when the company went in to Administration owing £905,379 to their UK creditors.

 

Industrial trading holding company CEPS PLC issues a profit warning, the Board announced that, losses at the CEM group, now including Sampling International, have increased significantly, due in part to the material integration and rationalisation costs. Group trading overall is materially behind expectations for the six months to 30 June 2019.

 

111 year old Electrical Engineering Company Humber Electrical Engineering Company (heeco) went in to Administration owing £1,920,200 to 157 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the Administrators report claimed that the company was outbid on two contracts worth £2 million, which left the company with a gap in production and an immediate cash flow problem”.

 

The food supplier linked to a fatal listeria outbreak The Good Food Chain Limited went in to liquidation owing £2,122,250 to 110 unsecured creditors.

 

Anaerobic digester Grays Biogas Limited sucked the air out of 36 unsecured creditors owed £17,663,200 when the fuel from waste business went in to liquidation. Greg Connell, MD of InfolinkGazette said: “secured charge holders share the pain of unsecured creditors as Land & Buildings with a book value of £10.2 million are reported to have no realisable value by the liquidator”.

 

Construction firm Venture Construction (Southern) Limited went in to liquidation owing over £3,149,650 to 30 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “in the statement of affairs, the liquidator lists a claim against “Mace Construction” with a book value of £1,250,000, but doesn’t account for any realisable value”.

Fast growing construction firm Bartley Construction Limited went in to liquidation owing over £1,720,000 to 81 unsecured creditors.

Another week, and yet another listed company discloses an Accounting error - Advertising agency M&C Saatchi discloses accounting issues and warns on profits, stating: the Board has made the decision to take a one-off exceptional charge of £6.4m to the Company's 2019 results. This equates to £4.9m of specific issues identified in the review. We believe we have discovered the full extent of the issues, but to be doubly sure, the Board is appointing independent advisors to undertake a review of all the Group's accounts and accounting systems, as well as setting aside an extra £1.5m as a conservative measure to provide for any potential further items arising. We expect the independent review to be completed by November this year. In addition, as part of the Company's ongoing assessment of its assets, it has decided to make an adjustment of £1.4m in respect of its property-related assets as it is in the middle of an office refurbishment

 

Power tool manufacturers took a hammering when building supplies retailer Marshall & Parsons Limited went in to liquidation owing over £760,000 to 41 unsecured creditors.

 

Online mobile phone retailer GPSK Limited went in to liquidation owing over £1 million to 22 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “all of the usual precursors to insolvency were present in the filing history: April 2017 accounts; a change of control; and an accounting period extension.”

 

Securities traders SHIRE WARWICK LEWIS CAPITAL LIMITED went in to liquidation owing £8.8 million to unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Czech investor Consult II SRO is owed £ £3,976,060, and according to Law360, Consult II were alleging that Shire Warwick Lewis Capital misused its funds in a bogus foreign exchange trade, because that transaction was carried out in euros. The asset manager rejected the allegations, calling them “unreal” and implausible.”

 

Digital agency Chalk Global Limited went in to liquidation owing over £1 million to 24 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the latest accounts were for the period ending 30 September 2017, and the 2018 accounts were not overdue because the previous accounting period had been extended”. Greg added “although there are legitimate reasons for extending accounting periods, it happens so frequently on companies that subsequently go out of business, creditors should see it as a warning sign”.

 

Affordable cosmetics business Warpaint London PLC issues a profit warning, blaming a number of factors including the geographic mix of sales, adverse exchange rate movements and the Group's investment in its strategy for future growth.

 

UK engineering group Senior PLC avoid issuing a profit warning but highlights concern over Boeing’s 737 Max grounding. The board stated: “we continue to monitor the developments on the 737 MAX situation closely and have yet to receive definitive information from Boeing about how long rate 42 per month build rate will be in place. Looking ahead, the Group is working to minimise the impact of the risk associated with the challenges.

 

Corporate pension deficits are set to rise for schemes that are not already fully hedged against changes in interest rates and inflation, as the UK benchmark 10-year gilt yield dropped below 0.50%; 10-year gilt yields have fallen from 1.7% in September 2018.

 

Greg Connell, MD of InfolinkGazette said: “falling bond yields are a direct result of the vast asset purchase schemes introduced by central banks to stimulate the economy, but pension funding gaps must be paid for by the sponsoring company and the negative cash flow impact of deficit contributions can cause financial distress”. Greg added, “trade suppliers should be mindful that they are generally making credit decisions based on 2018 accounts when the company’s pension scheme liability might have been much lower”.

 

Posh frock retail L K Bennett Limited went in to liquidation owing over £31 million to 219 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the company had been trading at a loss and ran out of cash around February 2019, when Wells Fargo reduced funding after the discovery of significant variances between recorded stock and physical stock”.

 

Unauthorised investment scheme operator, Xcore Capital Limited went in to liquidation owing over £1 million to unsecured creditors. Greg Connell, MD of InfolinkGazette said: “The UK financial services watchdog, the Financial Conduct Authority (FCA) had a £1 million enforcement order against the firm; the money would have been used to repay unfortunate investors”.

 

Death defying profit warnings – Funeral Directors, Dignity PLC issued a second profit warning over the number of deaths. The board stated that deaths in the first half of the year are 7% lower than the same period last year. Historical data over the last 20 years indicates that the number of deaths in 2019 is likely to be within three per cent of the previous year. The outlook for the full year therefore remains dependent on a greater number of deaths in the second half of this year than the previous year.

Greg Connell, MD of InfolinkGazette said: “that’s bad news for funeral directors, and bad news for Pension Plans, but good news for the rest of us”

 

FX traders Fixi PLC went in to liquidation owing £1,137,150 to 38 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “Fixi was still raising £2.2 million up to March 2018 but shut down operations in December 2018 after consulting with the FCA. UK Clearing House Limited were the largest single creditor, with losses of £420,000.

Liverpool based meter operator provider, Access Install Limited went in to liquidation owing £4,918,110 to 82 unsecured creditors. Greg Connell, MD of InfolinkGazette said: “the challenger energy supply sector has been a major blackspot for trade suppliers and alternative finance providers, but the blight now seems to have spread to the broader energy distribution sector”.

 

Cloud software provider, the AIM listed i-nexus Global plc issued a revenue warning but stopped short of warning on profits. The software solutions provided warned that the pipeline of opportunities is not converting at the rate required to meet the Board's revenue expectations for the financial year. Greg Connell, MD of InfolinkGazette said: “cloud spending has been the main focus of IT investment since 2017, and cloud service providers and technology vendors have seen rapid revenue growth. The market is still growing, but the rate of growth would appear to be slowing.”

Old established grain & seed merchants Isaac Poad & Sons Limited went in to liquidation owing £1,316,780 to 75 unsecured creditors.

Specialist printers Colour Five Ltd went in to liquidation owing £896,699 to 89 unsecured creditors.

When is a dormant company not really dormant - APRIL NUMBER 3 LIMITED formerly F W Evans, where Eci Partners Llp (the 2015 buyers of Evans Cycles) are listed as the person of significant control, has just filed a liquidator’s statement of affairs, showing £2.9 million owed to HMRC (no other creditors), after filing dormant accounts for the last 3 years.

 

Luxury car maker Aston Martin has slashed sales and profit forecasts in a trading update, with a revised outlook, ahead of its half-year results, blaming the challenging external environment and worsening macro-economic uncertainties.

The Volume of County Court Judgments (CCJs) against businesses in England and Wales rose 4% in the first half of 2019, according to figures released (July 24) by Registry Trust. Year-on-year volumes have risen for the past three years and that is despite the total value of business CCJs having dropped since 2018.

 

Greg Connell, MD of InfolinkGazette said: “trade creditors can take a crumb of comfort from lower value CCJ, but the rise in volumes is a indicator of higher levels of financial distress”.

Hyped fintech failure Loot Financial Services has left 32 UK unsecured creditors owed £1,200,000. Greg Connell, MD of InfolinkGazette said: “Shareholders of the 5 year old fintech company lost over £12 million”.

 

Car retailer Motorpoint Group Plc joined Lookers and Pendragon, by issuing a profit warning. Motorpoint has achieved revenue growth over the first three months of the financial year, but gross margin is below last year, which Motorpoint blamed on unusually high supply levels.

Bond holders in Four Seasons Healthcare holding company, Elli Finance (UK) Plc lost £218 million.

 

Piling specialist Van Elle issues third profit warning of 2019, stating: as part of the year end process, the Board has determined it necessary to adjust a small number of specific balance sheet items and contract accruals. Whilst the results remain subject to completion of the audit, these adjustments will adversely impact FY2019 adjusted profit before taxation by a total of c.£0.5m.

ASOS PLC issue second Profit Warning, the fashion retailed stated: we have absorbed and offset the profit impact associated with the warehouse transformation issues encountered in both higher transition costs and lost sales. However, we now expect the temporary lack of stock availability in Europe and more limited width in USA to continue to impact growth levels for the remainder of the financial year which when combined with extra costs to get our warehouses into a position to operate at the right capacity and efficiency has led to reduced expectations for this financial year. As a result, we now expect sales growth for this financial year to be broadly in line with year to date performance. The impact of the lower sales, higher warehouses transition costs and costs associated with organisational restructuring are set to impact our overall profit which is now anticipated to be in the range of £30m-£35m.

 

Irn-Bru maker, A.G. BARR plc. Issues a profit warning, stating: Revenue for the 26 weeks to 27 July 2019 is estimated to be in the region of £123m, representing a c.10% decline on the prior year and despite our strong second half plan it is not expected that we will recover fully from the volume impact in the first 5 months of this year and the current trading we are experiencing. As a result, we expect our profit performance for the full year to decline versus the prior year by up to 20%.

 

Qila Biogas Limited, licensed by Ofgem as a Gas Shipper, went in to liquidation owing £4,846,000 to 90 unsecured creditors. Agrivert Ltd, Evercreech Renewable Energy Limited, and SGN Commercial Services Ltd lost almost £1.8M between them.

 

Strike Off Action discontinued against potential buyers of Oddbins - The Compulsory strike-off action against European Food Brokers was discontinued on 13/07/2019 but the company remains overdue with their account’s filings at Companies House, with the most recent accounts dated 31 January 2017.

 

European Food Brokers, which bought Oddbins out of administration in 2011; appointed administrators for its retail operation; and, now seeks to rescue the stores. Greg Connell, MD of InfolinkGazette said: “trade suppliers shouldn’t have to operate in this information void and should be looking for suitable assurances or guarantees”.

Proposed recapitalisation of Thomas Cook Group will not impact trade creditors. Thomas Cook announced that it is in advanced discussions with the Group's largest shareholder, Fosun Tourism Group and Thomas Cook's core lending banks on the key commercial principles on which they would make a substantial new capital investment as part of a proposed recapitalisation and separation of the Group. Under the proposal, the Group is targeting an injection of £750 million of new money which would provide sufficient liquidity to trade over the Winter 2019/20 season and the financial flexibility to invest in the business for the future. At completion, the new money would comprise a capital injection and new financing facilities. The recapitalisation proposal is subject to certain conditions including performance conditions, due diligence, further discussions and reaching agreement with a range of company stakeholders (including the pension trustees, bondholders, other financial creditors and Fosun's shareholder approval), and receipt of any regulatory and anti-trust clearances or approvals.

 

Car dealers Lookers PLC issue Profit warning – Lookers stated: “Whilst the period began satisfactorily, trading during the three months ended 30 June 2019 ("Q2"), against strong comparatives, has proved increasingly more challenging. During Q2 the UK new car market continued to decline with registrations down -4.6% (Q1: -2.4%) versus the comparable period last year. In addition, weaker demand and the resulting margin pressure in the used car market has significantly increased, notably during the month of June in which we took a disciplined approach to managing stock. Throughout H1 and in line with general retail sector trends the Group has continued to experience cost inflation pressures. As a result, underlying profit before tax for H1 is expected to be approximately £32m* compared to £43m* in the comparable period last year.”

Eddie Stobart Logistics PLC, the UK logistics and haulage group, is to cut its profit from last year by about £2m, and the current year by £1.6m after the new CFO identified accounting issues.

 

 

7th July 2019 Press Release from InfolinkGazette

 

Funding Circle warns on revenue but not on profits, 2019 EBITDA performance is expected to improve on 2018. The CEO said: "The uncertain economic environment has reduced demand from small businesses and led us to proactively tighten lending criteria. As a result, revenue growth will be impacted.” Greg Connell, MD of InfolinkGazette said: “trade creditors should interpret this warning as signalling higher levels of risk across the SME sector and a good time to review credit insurance cover.”

 

In the Joint Administrators’ proposals for Debenhams PLC, unsecured creditors lost over £1.2 billion; 4 unsecured intercompany creditors lost £636 million; 8 Irish landlords lost £106 million; and, trade creditors lost £527 million.

Greg Connell, MD of InfolinkGazette said: “the unsecured trade creditors were predominately the bond holders, and the revolving credit facility lenders; unlike House of Fraser, traditional suppliers of products & Services seem to have got away lightly, so far.” Greg added, “Irish Landlords seem to have taken the hit in the Administration, and we can expect UK landlords to take the hit in the CVA.”

 

Failed retailer Pretty Green Limited, founded by former Oasis front man, Liam Gallagher has left 229 UK unsecured creditors owed £3,100,000.

Greg Connell, MD of InfolinkGazette said: “Pretty Green were an unsecured trade creditor of House of Fraser and lost £522,000 when the store entered administration last year.” Greg added: “it isn’t always possible to bounce back from that scale of loss”. Greg added: credit insurance cover isn’t always available, but when it is obtainable, can avert the disastrous consequences of becoming an unsecured creditor”.

 

Costain Group PLC issues a profit warning, blaming a number of delays to the timing of contract start dates and new awards, including the M6 Smart Motorway, Preston distributor road and HS2 Southern Section main works.  Additionally, the M4 Corridor around Newport project was cancelled by the Welsh Government earlier this month.  Revenue for FY2019 will be lower than previously anticipated and underlying operating profit for the full year is expected to be in the range of £38.0 million to £42.0 million. 

 

Manchester based Commercial Builders Freemont Ltd went in to liquidation owing £1,600,000 to 93 unsecured creditors; Travis Perkins were the biggest single unsecured trade creditor, owed £174,000.  Greg Connell, MD of InfolinkGazette said: “Travis Perkins have been an unsecured trade creditor 2150 times in the last 5 years, and are one of the most frequently occurring unsecured creditors”.

 

Ubercasual Limited (Trading As Jack & Jones) went out of business owing £1,600,000 to 11 unsecured trade creditors.

Failed entertainment park operator Boing Zone Limited, left 18 unsecured creditors, who were owed £750,000. Boing Zone Limited had a history of overdue filings at Companies House, accompanied by compulsory Strike-off notices.

Greg Connell, MD of InfolinkGazette said: “any creditor who checked out the event history at Companies House, would have been much more cautious about extending credit on open terms”.

Liquidated builders Blenheim Homes North East Limited, left 22 unsecured creditors, owed over £1.2 million. Blenheim Homes North East Limited were the respondent in an employment tribunal in December 2018, ordered to pay the claimant the sum of £11,926 as compensation for unlawful discrimination.

Ashley House Plc, the health and social care scheme provider warns on profits saying it might fail to meet market expectations due to uncertainty over achieving financial close on three care schemes operated through its Morgan Ashley joint venture.

Greg Connell, MD of InfolinkGazette said: “in February this year, Ashley House changed their accounting period and it looks like they specifically extended their accounting period from 30 April 2019 to 30 June 2019, to capture these transactions in the current financial year.”

Carnaby Street’s Spanish fashion brand El Ganso (Acturus Retail (UK) Ltd) went out of business owing 23 unsecured creditors £684,000, and with an Associated creditor owed £4.4 million, distribution to unsecured creditors are likely to be less than 5%.

European Food Brokers, which bought Oddbins out of administration in 2011; appointed administrators for its retail operation; and, now seeks to rescue the stores are overdue with their account’s filings at Companies House. The latest accounts filed are dated 31 January 2017.

Falling smartphones sales are hitting profits - IQE plc the semiconductor company expects to deliver Adjusted Operating Profit margin significantly below the previous guidance of over 10%; and, Dixons Carphone plc said: the UK mobile market is changing in the way we described in December, but doing so faster.

Greg Connell, MD of InfolinkGazette said: “trade suppliers need to be mindful of the elevated risk across the broader mobile market and would be advised to review credit exposure and trade insurance cover.”

Workplace equipment supplier H C Slingsby PLC blames profit warning on Brexit – claiming that the Group has suffered variability in its level of order intake since the decision to extend the Brexit date. The group also stated that sales in the five months to 31 May 2019 were 3.5% higher when compared to the same period in the prior year, operating profit in the four months to the end of April 2019 are lower than the same period to April 2018.

The Administrators failed to find a buyer for Better Bathrooms and 169 UK unsecured creditors have lost £3.3M; worldwide unsecured creditors lost over £8m, and floating charge holders have been wiped out.

Failed airline British Midland Regional Limited t/a Flybmi left 235 unsecured creditors over £20M out of pocket. Greg Connell, MD of InfolinkGazette said: “unsecured creditors will be nursing big losses, the only distribution to them will be the prescribed part, which is capped at £600,000”.

Make or break for 7digital Group PLC – In a stock Exchange Announcement today, the directors warned that if the £1.3 million proposed Debt for Equity Swap doesn’t proceed, the Group would only have sufficient working capital to trade through to late June 2019. Accordingly, based on the projected cash flows of the Group, it is highly likely the Company would need to be placed into administration.

 10th June 2019 Press Release from InfolinkGazette

Engineering services management company George Birchall Service Limited has left 568 unsecured creditors over £7.3 million out of pocket. Commenting on the failure and the losses incurred by unsecured creditors, Greg Connell, MD of InfolinkGazette said: “like a lot of outsourced services companies, Birchall operated on a tiny margins that didn’t cover the overheads. “ Greg added: margins are so low in this sector; these types of outsourced service business represent a significant risk for unsecured creditors trading without credit insurance. ”

Dudson Ltd, in Administration, was one of Englands oldest china manufacturers and left substantial debts, with 199 UK unsecured creditors owed over £6.5 million. Commenting on the failure and the losses incurred by unsecured creditors, Greg Connell, MD of InfolinkGazette said: “Churchill China Picked up the business in a pre-pack for £2.1 million, but with uncertainty over the prescribed amounts, unsecured creditors without credit insurance could be left with nothing”.

Loss making Modern Water plc seeks additional working Capital – Modern Water, the water and wastewater treatment company announced today that cash flows have been slower than anticipated from the Membranes Division and, consequently, additional working capital will be required in the short-term to meet the Group's requirements. The Board is engaged with a number of potential funding parties with a view to providing the working capital needed, which may or may not include a new equity issue.

Kier Group PLC Profit Warning – Kier surprised the market with a £25 million profit warning today, blaming volume pressures within its Highways, Utilities and Housing Maintenance businesses, and lower than previously forecast revenue growth in the Buildings business.

Greg Connell Managing Director of InfolinkGazette said: “the doomed outsourcers Carillion PLC and Interserve PLC all failed to achieve their forecast, and were forced to issue profit warnings before their eventual demise”, Greg added, Kier’s 2018 accounts reveal a company that is cash flow negative, with a working capital deficit and a negative net worth (after deduction of intangibles).”

Chamberlin hit by Bad Debt - the specialist castings and engineering group, announced it is in the process of finalising the results for the year to 31 March 2019 and following a final review with its auditors the Company now expects to report an operating loss before non-underlying items some £0.3m worse than previously indicated, mainly reflecting a specific bad debt.

Profit Warning - Money Supply M2 in the United Kingdom increased to an all-time high of 2,415,570 GBP Million in March of 2019, but it is the wrong type of money for De La Rue Plc, who issued a profit warning today, stating: “The banknote print market is anticipated to become increasingly competitive as the strong demand driven by overspill in the last few years starts to normalise. Overall, the Board expects operating profit for FY20 to be somewhat lower than the current year.”

Hargreaves Services PLC have become the first listed company to issue a profit warning on the back of the demise of British Steel, stating that the potential impact on Hargreaves cannot be fully determined, but that the Board estimates that the Group has a current net exposure of approximately £4.5m to British Steel comprising trade debt and work-in-progress balances, some or all of which may prove to be irrecoverable were British Steel to be unable to continue trading.

Redundancy and other associated employment costs may result in a further non-recurring charge of up to £3.0m against Group profits. Potential asset write downs and leasing obligations amount to an additional £1.5m, resulting in a possible total exceptional charge of £9.0m. Additionally, if British Steel ceases to trade, this could reduce the Group's revenue in the next financial year by approximately £11m and its profit before tax by about £1.3m.

Energy supplier Brilliant Energy Supply Limited left 68 UK unsecured creditors owed over £1.7 million (£6.3m including overseas suppliers) when it was forced into insolvency after receiving 8 Statuary Demands. Commenting on the failure and the losses incurred by unsecured creditors, Greg Connell, MD of InfolinkGazette said: “according to Companies House filings, Brilliant had no capital and no reserves, like so many energy supply companies, they were doomed from the moment wholesale energy prices turned against them”.

British Steel & the Big Short - Warren Buffet once said It's only when the tide goes out that you learn who has been swimming naked; well the tide is out for the owners of British Steel, who sold all of their carbon credits in what now looks like a badly timed trade, before carbon credits doubled in price. That wouldn’t normally have been a problem because any short positions would have been covered by new credits from the EU, but in the light of Brexit, the carbon credit gravy train has ground to a halt, and with it, hopes for UK steel production.

Greg Connell Managing Director of InfolinkGazette said: “it makes you wonder if the British Steel short was out of the ordinary or are we about to see similar problems across the energy-intensive sector”.

Monarch Aircraft Engineering Limited the engineering arm of collapsed airline Monarch, went out of business owing almost £6 million to 410 unsecured creditors.

Greg Connell Managing Director of InfolinkGazette said: “Monarch Aircraft Engineering Limited didn’t go into Administration when the airline collapsed but never really recovered from losing its biggest customer, which had contributed over 50% of revenues.”

Textile processor and AIM listed Leeds Group Plc issues a profit warning today, the 2nd in 2 months, cautioning that market conditions have deteriorated further since March 2019, and the Board now expects the Group's revised expectations for the current financial year to be significantly below last year.

Trade Credit Risk Up for Q1 2019 as County Court Judgments (CCJs) Volumes Rocket.

England & Wales Business CCJ Volumes increased 12% to 35,779 in the first quarter of 2019, according to figures released today by Registry Trust. The total value of business CCJs was £107.2million, up 6% on the same period in 2018.

Greg Connell Managing Director of InfolinkGazette said, “the volumes and values have been rising for 3 years but we can only speculate over the factors driving the increase because the Ministry of Justice won’t provide the names of the CCJ claimants.” Greg added: “what we do know, is that the majority of CCJs are either finance or trade credit defaults, and that means the risks faced by unsecured creditors are on the increase”.

Death is not as certain as previously believed - Dignity PLC the funeral directors have issued a profit warning as a result of the significantly lower than expected number of deaths.

The absolute number of deaths decreased by approximately 12 per cent to 159,000 from 181,000 in the comparative period last year.

7th May 2019 Press Release from InfolinkGazette

Cleaning Product manufacturer McBride PLC issue second profit warning of 2019, stating “following a weak third quarter trading period, the Group now anticipates that its full year earnings will be modestly lower than current market expectations, primarily as a result of weaker than expected sales activity in Germany, France and Italy.”

British Ceramic Tiles Ltd the UK’s largest manufacturer of ceramic wall and floor tiles had debts of over £17 million and 296 unsecured creditors listed in the Administrators Statement of Affairs. The top 5 creditors lost over £12 million. Commenting on the losses, Greg Connell, MD of InfolinkGazette said, “British Ceramic had assets of over £64 million, which realised less than £25 million; secured creditors were owed over £30 million, leaving just the Prescribed Part (£600,000) for distribution to unsecured creditors”.

After issuing a profit warning earlier this month, the Board of Tex Holdings plc has asked for the shares to be suspended, stating that the company had been unable to supply audited accounts for the year to 31st December 2018, within the permitted four month period.  After initially believing that a change to accounting standard IFRS15 had been partially responsible for the breach of bank covenants, it is now evident that the cause of the breach had been weak trading in the second half of the year.   

Chintzy retailer Laura Ashley have issued a fresh profit warning, stating: "trading conditions have been very demanding over the third quarter. The Board of the Company have reviewed the revised full year forecasts for the year ending 30 June 2019 and expect the results to be significantly below market expectations."

Chaotic energy firm Utilitywise PLC left behind substantial debts, with 162 unsecured creditors owed over £26 million. Commenting on the failure and the losses incurred by unsecured creditors, Greg Connell, MD of InfolinkGazette said: “Utilitywise were late filing a very heavily qualified 2017 annual report and accounts at Companies House; the auditors raised a number of revenue recognition issues and retrospective covenant breaches”. Greg added, "there is hardly a month in between Energy Firms failures, and suppliers should be carefully managing exposure, monitoring risk and securing credit insurance where it is available".

420 Unsecured Creditors of Arjo Wiggins lose over £14M - The Administrators for renowned paper product manufacturers Arjo Wiggins (Wiggins Teape) filed a Statement of Affairs (SOA) at Companies House showing 420 UK unsecured creditors lost over £14M as a result of the Insolvency. Wiggins was once listed on the London Stock Exchange and used to be a constituent of the FTSE 100 Index. Commenting on the losses, Greg Connell, MD of InfolinkGazette said, “Balance Sheet assets of over £123 Million are expected to realise less than £20 million, which demonstrates how value can simply melt away in an insolvency situation”. Greg added, "the fortunate few with credit insurance cover can expect to cover 90% of their losses; those unsecured creditors supplying without credit insurance cover, will only receive their share of the £600,000 Prescribed P

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